CNO Financial Group Q3 2023 Earnings Call Transcript

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Provided by Quartr
November 7, 2023

Key Takeaways

  • In 3Q23, CNO delivered operating earnings per share of $0.88, up 31% year-over-year (10% ex-significant items), driven by strong insurance margins and improved variable investment income.
  • Total new annualized premium grew 13% year-over-year, with notable strength in life (+8%), Medicare supplement (+9%), long-term care (+48%) and worksite insurance (+36%).
  • The company’s new money rate exceeded 6% for the sixth consecutive quarter, helping drive over 5% growth in net investment income allocated to products and a 42% increase in unallocated investment income.
  • Capital and liquidity remained well above targets with a 3.92% RBC ratio, $57 million of share repurchases in the quarter, a 6% rise in book value per share (ex-AOCI) and establishment of a Bermuda affiliate ceding $6.2 billion of annuity reserves.
  • Producing agent counts climbed meaningfully—up 9% in the Consumer division and 24% in Worksite—supported by record recruiting, productivity gains and technology investments in enrollment platforms and accelerated underwriting.
AI Generated. May Contain Errors.
Earnings Conference Call
CNO Financial Group Q3 2023
00:00 / 00:00

There are 8 speakers on the call.

Operator

Welcome to today's CNO Financial Group Third Quarter 2023 Earnings Call. My name is Jordan, and I'll be coordinating your call today. I'm now going to hand over to Adam Orville to begin. Adam, please go ahead.

Speaker 1

Good morning. Thank you for joining us on CNO Financial Group's 3rd quarter 2023 earnings conference call. Today's presentation will include remarks from Gary Boiswani, Chief Executive Officer and Paul McDonough, Chief Financial Officer. Following the presentation, we will also have other business leaders available for the question and answer During this conference call, we will be referring to information contained in yesterday's press release. You could obtain the release by visiting the Media section of our website at at cnoinc.com.

Speaker 1

This morning's presentation is also available on the Investors section of our website and was filed in the Form 8 ks yesterday. We expect to file our Form 10 Q and be posted on our website on or before November Let me remind you that any forward looking statements we make today are subject to a number of factors that may cause actual results to be materially different than those contemplated by the forward looking statements. Today's presentation contains a number of non GAAP measures, which should not be considered as substitutes for the most directly comparable GAAP measures. You'll find a reconciliation of the non GAAP measures to the corresponding GAAP measures in the appendix. Throughout the presentation, we'll be making performance comparisons, and unless otherwise specified, Any comparisons made will be referring to changes between Q3 2023 and Q3 2022.

Speaker 1

And with that, I'll turn the call over to Gary.

Speaker 2

Thanks, Adam. Good morning, everyone, and thank you for joining us. CNO again delivered a solid financial performance for the quarter. Operating earnings per diluted share were up $0.88 excuse me, up to were $0.88 up 31%. Excluding significant items, operating earnings per share were up 10%.

Speaker 2

The fundamentals of our business remain sound, including double digit growth in total new annualized premium, Continued sales momentum balanced across product lines, strong net investment income, a robust capital position and continued strong free cash flow generation. For the 3rd consecutive quarter, new money rates exceeded 6%, continuing the positive trend in our earned yield. Variable investment income improved for a 2nd consecutive quarter. Health claims moderated in the quarter as expected. Sales production and agent recruiting and retention delivered Strong balanced results across both our Consumer and Worksite divisions.

Speaker 2

Total new annualized premium was up 13%. We reported sales growth in nearly all product categories, including field and B2C life sales, Medicare supplement, long term care, annuity collected premiums and worksite insurance sales. Producing agent counts were up meaningfully at both divisions. Capital and liquidity improved over the Q2 and was above target levels even after returning $57,000,000 to shareholders. Book value per diluted share, excluding AOCI, was $33.75 up 6%.

Speaker 2

We are pleased to announce that we established our Bermuda affiliate and received all necessary approvals related to our initial reinsurance transaction. Paul will go into further detail during his remarks. We applaud and thank our CNO team for their exceptional work and commitment to helping us establish CNO, Bermuda REIT. Turning to Slide 5 and our growth scorecard. Our Consumer and Worksite divisions delivered strong overall results, including Beginning with the Consumer division on Slide 6.

Speaker 2

Sales momentum accelerated in the quarter with results balanced across the product portfolio. Life and Health MAP was up 9%. Life production was up 8% with field sales up 6% And B2C Life sales up 9%. Strong B2C sales reflect our measured and opportunistic approach to advertising spend. HealthNAP was up 11% in the quarter and is up 11% year to date as our growing agent counts and new product introductions for sustained sales growth.

Speaker 2

Long term care NAPP was up 48% following the launch of our new long term care fundamental Plus product in 45 states in August. This launch continues our strategy to offer plans to the middle market that cover essential costs for the first one to 2 years of care. As the U. S. Population ages and we are living longer, the need for practical long term care solutions Our long term care policies with shorter duration benefit Periods provide a balanced, affordable approach to funding long term care.

Speaker 2

More than 98% of the policies we sell have benefit periods of 2 years or less. Medicare Supplement NAP was up 9% as consumers continue to embrace our new plans. Presently, we are in the midst of the Medicare annual enrollment period, which began on October 15 and runs through December 7. Using our myhealthpolicy.com online platform, our agents can enroll consumers in Medicare Advantage and Medicare Prescription Drug Plans from 14 different plan sponsors. This season, we have nearly 3,200 agents certified to sell these plans, which is up 14% over last year.

Speaker 2

We are off to a strong start. Our local agents are Key differentiator in making these sales and reducing churn. Agents bring local knowledge that is uniquely suited to help customers with their enrollment decisions. They build enduring relationships while assisting with the additional insurance and retirement planning needs. Our capabilities To market nationally and complete the vital last mile of the sale to a local agent is a unique and valued strength.

Speaker 2

We also recognize the need to supplement human interaction with technology. 2 new initiatives illustrate how we're using technology enabled tools to in operational efficiencies and improved customer value. In preparation for the AEP, we invested in our Medicare health insurance technology platform to to expand scale and enhance our capabilities. Over 95% of all Medicare Advantage and prescription drug plans are now submitted through our myhealthpolicy.com portal. Earlier this year, we also implemented accelerated underwriting on a portion of our simplified life products.

Speaker 2

This quarter, approximately 75% of those applicants received an instant decision. Annuity account values were up 4% year over year and collected premiums were up 1%. As noted previously, our proprietary distribution model and the long term relationships that our agents build with customers provide stability to this block and persistency remains within expected levels. Client assets in brokerage and advisory were up 18% year over year to $2,900,000,000 Total accounts were up 7% in And clients continue to entrust us with strong net inflows. We are very pleased with our agent performance in the quarter.

Speaker 2

Recruiting was up 22%, our 5th consecutive quarter of growth, and we posted our best overall recruiting quarter since Q3 of 2020. Through these efforts and good agent retention practices, our producing agent count continues to grow, up 9%. Next, Slide 7 and our worksite division performance. I'd like to first congratulate 2 members of our management Mike Byers and Karen Detourle. We recently announced that Mike Byers, the President of our Work Site division, will be retiring early next year.

Speaker 2

We named Karen Dottoro, currently our Chief Actuary, as Mike's successor to lead CNO's worksite business. This news reflects CNO's ongoing commitment to and investments in our worksite business and Optimize. Karen's deep knowledge of our business and the employee benefits and insurance space Well matched for the next stage in the evolution of this division. We remain bullish on this business, and I look forward to the continued success We can achieve under Karen's leadership. I would also like to congratulate Jeremy Williams, who will succeed Karen as our Chief Actuator.

Speaker 2

All three of these internal moves are testament to our deep bench strength of leadership talent at CNO. Karen, Mike and Jeremy will work closely over the coming months to ensure a seamless transition. Turning to our Q3 results. Worksite Life and Health Insurance sales were up a record 36%, which represents a 14% increase above pre pandemic sales levels. In 4 of the past 5 quarters insurance sales growth has exceeded 20%.

Speaker 2

As a reminder, immediately prior to the onset of the pandemic, Our worksite insurance business posted record sales with 8 consecutive quarters of growth. Last quarter, our worksite insurance sales Seeded pre pandemic levels for the first time since 2020. This quarter, we expanded those gains by double digits. Total producing agent counts were up 24% and agent productivity was up 5%. Among our 1st year agents, producing agent counts were up 58% and productivity on that cohort was up 41%.

Speaker 2

As a reminder, Agents must reach a certain level of production to be considered a producing agent. Our successful worksite agent referral program and enhancements to our new agent onboarding program, accredited for driving these meaningful agent productivity gains. In the Q3, we advanced Several initiatives and partnership programs that focused on accelerating growth and adding value to our employers and employees. Our geographic expansion initiative is experiencing early success in key markets where we've identified strategic opportunities to grow our market share and footprint. Late in the quarter, we also launched a nationwide training program focused on helping agents identify and cultivate new worksite accounts.

Speaker 2

2 new third party technology partnerships will bring enhanced tech enabled services to our benefits enrollment offerings. Through these partnerships, we recently added enhanced decision support to our benefit administration platforms and clinical advocacy and virtual care options to our Both the sales initiatives and the technology partnerships received a positive initial reception. Additionally, the new accident insurance product that we introduced in June continued to perform well with sales topping more than $4,000,000 in NAP. Year end benefits enrollment season is a critical time for employers and our worksite business. Our team is well prepared to serve and support our clients.

Speaker 2

As I shared last quarter, we are squarely focused on 3 strategic worksite growth priorities: continuing the integration of our worksite capabilities under the Optimize brand, expanding distribution capabilities in our national and Regional employer markets through new broker relationships and strategic alliances and accelerating momentum in agent recruiting to grow producing agent counts. And with that, I'll turn it over to Paul.

Speaker 3

Thanks, Gary, and good morning, everyone. Before turning to my remarks on the quarter, I'd like to comment on our newly formed Bermuda affiliate, CNO Bermuda Re and the initial reinsurance treaty. We have received all necessary approvals and are in the process of implementing the transaction with an effective date of October 1, 2023. Under the treaty, we are ceding approximately $6,200,000,000 of in force fixed indexed annuity statutory reserves. In addition to new FIA business from our U.

Speaker 3

S. Domestic company Bankers Life and Casualty to the Bermuda company. We are proud to have joined the Bermuda insurance community and look forward to working closely with the Bermuda Monetary Authority as we build out this business. Turning to the financial highlights on Slide 8. We generated operating earnings per share of 0.88 in the quarter, which is up 31% year over year as reported and up 10% excluding the significant item this period.

Speaker 3

Results in the quarter reflect strong insurance product margins and improved variable investment income results. Fee income in the quarter declined year over year for two reasons. Number 1, in our consumer business, despite a 3% increase in Medicare Advantage policies issued, revenue was down as the favorable impact of assumption changes under ASC 606 accounting Has diminished over time. And then secondly, in the fee income side of our worksite business, revenues and expenses have been pressured as we've invested in this platform to position it better for the future. Keep in mind that our fee income is highly seasonal, driven by the Medicare Advantage annual enrollment period resulting in higher income in the 1st and 4th quarters.

Speaker 3

Expenses more broadly in the quarter were a little on the high side, but within the range of our expectations. On the capital front, we completed $40,000,000 of share repurchases in the quarter and continue to manage well above our capital and liquidity targets. Turning to Slide 9. Insurance product margin was strong in the quarter with some variability across product lines. Fixed Indexed Annuity Margins Reflect Moderating Spreads and Growth in the Block.

Speaker 3

I will note that current spread levels are consistent with pricing and target In other annuities, mortality was favorable in the prior period and in line with expectations in the current period. In our health products, supplemental health margins benefited from growth in the block and continued favorable claims experience. Claims experience in long term care and Medicare supplement was in line with expectations, rebounding from the elevated claims we had experienced in the Q2. Med supp margins reflect the continued runoff of the legacy block of business and growth in the new block. Long term care margins in the prior year period reflected particularly favorable claims experience still somewhat COVID related, which we did not expect would be repeated in the current period.

Speaker 3

Finally, Life margins benefited from growth in the block. Turning to Slide 10. The new money rate in the quarter was 6.03%, up from 5.36% in the prior year period and down slightly versus 6.32% in the Q2 of this year. This is the 6th Consecutive quarter with new money rates in excess of the average yield on our allocated investments and the 3rd consecutive quarter of new money rates above The average yield on allocated investments increased to 4.69% in the quarter, up 12 basis points year over year and 4 basis points sequentially. The steady increase in yield along with strong production, Driving growth in net insurance liabilities and the assets supporting them contributed to the 2nd consecutive quarter of plus 5% growth in net investment income allocated to products.

Speaker 3

Investment income not allocated to products Increased nearly 42% in the quarter, primarily driven by an improvement in income from alternative investments. Results remain below our long term return expectations for this asset class. However, we are pleased to see this improvement. Our new investments in the quarter comprised approximately $550,000,000 of assets with an average rating of AA- in an average duration of just under 8 years. Our new investments are summarized in more detail on slides 21 and 22 of the presentation.

Speaker 3

Turning to Slide 11. Approximately 97% of our fixed maturity portfolio at quarter end Was investment grade rated with an average rating of A, reflecting our up in quality actions over the past several years. In the last 12 months, the allocation to single A rated or higher securities is up 4 20 basis points. The BBB allocation is down 320 basis points and the high yield allocation is down 100 basis points. For the 1st two quarters of 2023, we shared additional disclosures on our commercial real estate portfolio.

Speaker 3

This asset class continues to perform well. We've again included metrics on these investments in Slides 2324 of the presentation. Turning to Slide 12. We ended the quarter with a consolidated RBC ratio of 3 92%, up 6 points from 2nd quarter and comfortably above our 3 75 percent target. HoldCo liquidity was $171,000,000 above our target of $150,000,000 In the Q3, we expanded the sale leaseback program announced last quarter, resulting in an additional $37,000,000 reduction in non admitted assets and corresponding increase in total adjusted capital.

Speaker 3

Turning to Slide 13. I would emphasize 2 things from our updated outlook. The midpoint of our projected full year operating EPS Ex significant items is unchanged at $2.75 and our projected full year excess cash flow to the Holdco is now $330,000,000 to $350,000,000 which includes the impact of the intercompany reinsurance treaty with our new Bermuda affiliate. Before turning it back to Gary, I'd just like to take a moment to recognize my colleague and the company's long time Chief Accounting Officer, John Klein. As previously disclosed, John will be retiring at the end of this year.

Speaker 3

And consequently, this is our last financial close with John as CAO. He has been a valued partner, advisor and mentor to many of us at CNO over the years. I am not alone in recognizing that his leadership, Professional expertise and integrity will have a lasting impact on the company long after he retires. We are also delighted to welcome Mickey Wilden to CNO. Mickey is an experienced leader in the industry and will succeed John as CAO in January.

Speaker 3

And with that, I'll turn it back to Gary.

Speaker 2

Thanks, Paul. We continue to be pleased with our strong performance and the steady execution against our strategic priorities. The 4th quarter is a critical period for our business. For the Consumer division, it is the Medicare annual enrollment period. For the Worksite division, most employers conduct their employee benefits enrollments from October through December.

Speaker 2

We expect to end the year strong. Ciena's growth and shareholder return opportunity remain compelling. Our sales production continues to generate balanced growth across our businesses and across our product lines, And our balance sheet and financial flexibility are strong as reflected in our solid capital position. Entering the Q4 and looking ahead to 2024, We remain confident in our ability to execute on our strategy to serve middle income America, enhance customer value, to drive profitable growth and deliver shareholder value. We thank you for your support of and interest in CNO Financial Group.

Speaker 2

We will now open it up for questions. Operator?

Operator

Thank you. Our first question comes from Ryan Krueger of Stifel. To begin. Ryan, please go ahead.

Speaker 4

Hey, thanks. Good morning. My first question was on use Of excess capital, I guess, now that your free cash flow guidance for the year increased by $150,000,000 following the Bermuda Approvals, can you give any sense of how you'd expect to return that excess capital and what sort of timing you'd be thinking of?

Speaker 3

Sure. Good morning, Ryan. It's Paul. So how we think about the deployment of excess capital has not changed. Certainly, the Bermuda Reinsurance Treaty increases the amount of excess capital that will sit at the HoldCo, And that in turn increases the amount of share repurchase capacity.

Speaker 3

So that sort of landscape Changed in that way, but the way we think about deployment hasn't changed at all.

Speaker 4

Got it. Thanks. And then

Speaker 3

can you help us

Speaker 4

think about the level of free cash flow you'd To generate beyond this year, I don't know if maybe free cash flow as a percentage of GAAP earnings or something along Those lines, but just trying to think through that I think there should be some ongoing benefit of seeding business to Bermuda. Any color you can help us with there?

Speaker 3

Sure. So certainly, there will be a benefit on the some capital relief on the FIA new business that we'll see to the Bermuda company. I could give you a number for that in isolation, but there are so many puts and takes that what I'd prefer to do is provide An outlook for free cash flow for the full year 2024 on our 4th quarter Earnings call when we'll provide an outlook more broadly for 2024. And that free cash flow Outlook will include the impact of the Bermuda treaty on the new FIA business.

Speaker 4

Understood. Makes sense. Thank you.

Operator

Our next question comes from Scott G. Heliniak of RBC. Scott, the line is yours.

Speaker 5

Thanks. I just wanted to ask a couple of quick questions on the Health business. We're about 5 weeks into the 4th quarter And you saw some moderation in the claims experience in the LTC and the Medicare supplement. I'm just wondering if you can give a little bit of an update What you're seeing kind of in the Q4 versus Q3, are you seeing similar trends or is there any moderation or anything that's really changed at all?

Speaker 3

Good morning, Scott. It's Paul. We haven't seen anything that would suggest a change In the trends, we had a little bit of a spike in the second quarter. We thought that was temporary And would rebound in the second half. We indeed saw that in the Q3, and our expectation is that, that generally continues.

Speaker 5

Okay. And it sounds like you had a good quarter for the recruiting. And you mentioned a few reasons for that. But if just wondering if you can Just kind of elaborate on that, how you're able to attract more talent there? And then just if you could if you can marry that up with The comments you made about geographic expansion and so just kind of what you're doing on the agency side?

Speaker 2

Yes. Thanks for this question, Scott. This is Gary. I'll give you a couple of answers. First, the short answer on the agent recruiting efforts, These are things that we've been working on for many years.

Speaker 2

We've been implementing and experimenting with different support programs, with different recruiting programs, with different training programs, And we've continued to refine our model, over many years so that what we're presenting to agents is a true career path, where they can start as an insurance agent selling life insurance and or medical pro Medicare supplement, as an example, and then evolve into becoming a true financial advisor. And to be honest, I can't give you one thing we've done or even 2 or 3 things we've done. We've done tens, if not dozens of small things to build this into a more attractive offering where they're supported and trained and so on. So that has continued, and that's what got us through the pandemic, frankly, and you saw Productivity. The other thing that we have going for us right now, and I say that with, I guess, some caveats, When the economy softens, typically, a career path like ours is open for more people to consider trying to make a change.

Speaker 2

So we're benefiting to some extent from some of that. Now I know employment has remained strong, But I think it's the collection of factors, what people are looking at out there in the economy, what we're able to offer in terms of career path and support and training and so on. And all of those things are coming together very nicely for us. So I'm really proud of the team. I mean, the recruiting that they've done on both the work side and the consumer on the insurance sales has really been exceptional, and I'm just thrilled with how well we're doing with keeping those talented people as part of the organization and growing them.

Speaker 2

Hopefully that helps.

Speaker 5

Yes, that makes sense. And anything to offer on the geographic expansion? Is that just nothing new, just Anything more to add there?

Speaker 2

No. There's a fair bit there that's new. That was I believe that comment or where that was in our script was referring to the worksite business. And our work site has historically been more concentrated in farming or rural communities, and we see an opportunity to continue to expand that. Excuse me, I should say, The captive agent that supports that side was historically more concentrated there, and we're continuing to grow that.

Speaker 2

So in the worksite business, We see more opportunities in other geographies, and we're definitely pushing into that. And again, the leadership team there has really done a wonderful job.

Speaker 4

Yes.

Speaker 1

That's helpful. Thanks.

Operator

Our next question comes from John Barnidge of Piper Sandler. John, please go ahead.

Speaker 6

Good morning. Thanks a lot. Appreciate the opportunity. My question is around guidance. Can you maybe talk about the bridge in earnings as we think about $0.74 ex notables to the Q4.

Speaker 6

I know there's volatility around Fee income and investment income not allocated to product lines. So curious if you could provide some help there? Thank you.

Speaker 3

Sure. Good morning, John. It's Paul. So I would point to a few things. Number 1, expenses are seasonally lower in the 4th quarter.

Speaker 3

Fee income, as you mentioned, is heavily weighted to the Q4 and that's driven by Med Advantage, and That's a business that we've been investing and growing. Gary gave you some data points on that in his remarks. And then we're assuming some modest continued sequential improvement in NII not allocated. So it's really those three things that I would emphasize as you try to bridge from Q3 to Q4 and get to the midpoint of our guidance for the full year.

Speaker 6

Thank you for that color. Appreciate it. And my follow-up, there's been Some comments at least from retailers about the impact of GLP-one or obesity medication. How do you think about that specifically or for The hell of long term care and life insurance parts of your business. Thank you.

Speaker 2

I'll make a broad comment there, I can't offer you a specific analysis that we've done in terms of looking at what the impacts will be. We don't have that, so let me be for coming about that. If I can, I'll step back though and speak more generically. As a general rule, anything that improves the health of consumers It's good for our business. We like it when our consumers are healthier.

Speaker 2

They have fewer health claims. We like it when they live longer. They Their life insurance premiums for more years. And we like it even in our annuity business because as they're thinking about longer life spans, they're planning for that, and it helps our retirement business. So our general view is anything that makes for a healthier America or a healthier American consumer is good for our business.

Speaker 2

We like that. At least based on the data that I've seen, the net benefits are positive. My understanding is that these drugs Help people avoid heart conditions. They help them avoid obesity. They help them avoid diabetes.

Speaker 2

All of those Things result in fewer claims and a healthier life. So we think long term, it's going to be good for our business. I'm not a medical expert. We don't Have the analysis on what the long term consequences are. But even on the long term aspects, my understanding is many of these drugs, albeit in the diabetes context, have been used for quite sometime.

Speaker 2

So there is a bit of a track record on many of these drugs. And so we think it's a good thing. Time will tell, but that's how we view it.

Speaker 6

Appreciate it. Thanks a lot.

Operator

Our next question comes from Suneet Kamath of Jefferies. Suneet, please go ahead.

Speaker 7

Thanks. Good morning. Just looking at your scorecard, your annuities collected premium sort of flattish year over year. And I think you had some comments in your script about your distribution model being different, which I understand. But as we think about the rate environment now, it seems like a pretty Attractive opportunity.

Speaker 7

How do you see annuity collected premium sort of developing as we move into Q4 but also 2024?

Speaker 2

Let me first comment on just what you saw in terms of results. Typically, you'll see annuity volumes or interest in annuities fluctuate depending on what's happening with the average consumer's belief in interest rates and or stock markets. So we see that bumping around and this Time is no exception. I do want to emphasize a couple of things. The nature of our model, because we have captive distribution in the way those agents are compensated and managed, We feel like we have a better chance of reducing churn and other types of things that long term are not beneficial.

Speaker 2

So we feel good about our persistency and so on. More to the point, when we look at actual experience in terms of persistency and the consumers we're bringing on, All of this is within expected ranges. So we don't see any area for concern here. We think that the annuity business will continue to be healthy and continue to be attractive to our middle income consumers. And we'll have a quarter here or there that's up or down, but we feel really good about the Aggie Youth opportunity.

Speaker 2

Paul, do you want to add any color to that?

Speaker 3

No, I think that covers it well.

Speaker 7

Okay. And then sort of relatedly, I think that what you said in your script when you're talking about spreads, it sounded to me that maybe spreads have Sort of stopped expanding here and we should expect them to be somewhat stable ahead. Is that the right read based on what you said?

Speaker 3

Yes. I think that's fair, Suneet. I mean, basically, what's happening is that we have and we enjoyed some wider spreads and some of the older Issuances, somewhat narrower spread on some of the newer issuances. And as you have some of the older issuances run off or surrender, you have that year over year comparison. But I think it's important to emphasize that although the spreads have contracted a little bit, they're still well within our pricing targets and return targets.

Speaker 7

Got it. If I could just sneak one more in, just a follow-up to John's question on the unallocated VII. Can you just provide a little bit more color on what you're expecting for 4Q? Is it sort of back to normal? Or just anything there would be helpful.

Speaker 3

Sure. So a component of our NII not allocated is our alternative investments. And in the quarter, the 3rd quarter, They generated an annualized return of about 4.6%. So a significant sequential improvement, but Our long term sort of run rate expectation for that portfolio is closer to 9%. But that's one component of NII not allocated.

Speaker 3

Other elements of it made up some of that difference, the FHLB program in particular. So as I mentioned a moment ago, our expectation for NII not allocated in total Sequentially from Q3 to Q4, we'd expect a fairly modest improvement relative to our full year EPS guidance.

Speaker 2

Okay. Thanks.

Operator

As there are no additional questions right at this time, I'd like to turn the conference call back over to Adam Orville for closing remarks.

Speaker 3

Thank you, operator, and thank you all for participating in today's call. Please reach out to the Investor Relations team if you have any further questions. Have a great rest of your day.

Operator

Ladies and gentlemen, this concludes today's CNO Financial Group Third Quarter 2023 Earnings Call. Thank you for joining. You may now disconnect your lines.

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